Harsha Kakar
kakarharsha@gmail.com
The India-EU free trade agreement has been dubbed as the ‘mother of all deals,’ by both India and the EU. A part of the agreement was the Security and Defence Partnership (SDP), inked by defence minister Rajnath Singh and his counterpart, EU High Representative, Kaja Kallas. India becomes the third nation in Asia, after Japan and South Korea, to have such an agreement with the EU. The defence agreement was one of the 13 outcomes flowing from the India-EU summit.
The SDP covers a dedicated security partnership aimed at strengthening defence manufacturing, supply chains as also joint engagement in the Indian Ocean. The EU will also post a liaison officer at the Indian Navy’s Information Fusion Centre-Indian Ocean Region in Gurugram. The centre already has liaison officers from 12 partner nations including the US and UK. Cooperation in the maritime domain would include joint exercises with an emphasis on anti-piracy operations as also securing critical sea lanes. Possibly later joint exercises involving other services would commence.
For Europe, banking on the US for its security is no longer an option. Trump’s insults to the EU and its leaders have been increasing mainly because Europe is dependent on the US for its security as also defence equipment. It has to create capabilities for its own defence as also diversify its defence procurements if it seeks to remain relevant. For India, a nation with active borders with two nuclear powered adversaries, enhancing capabilities in defence with updated technology and funding has to be a continuous process. Hence, for both, the SDP is a win-win.
The agreement specifically mentions collaboration in maritime security, cyber and space, hybrid threats, counterterrorism, capacity building and defence industry cooperation. It also institutionalizes the India-EU annual Security and Defence Dialogue. The joint statement mentions that both sides will consult each other on defence initiatives while exploring possibilities for collaboration.
In Oct last year, India and the US had signed a 10-year defence agreement to include technology sharing, maritime security and strategic industrial partnership, however, India remains hesitant on procuring from the US based on high costs, delays as also the changing global landscape, where Indo-US ties appear to be stalling. India too needs to diversify its procurements.
Kaja Kallas rightly stated, ‘The signing of the Security and Defence Partnership is a milestone, and we can build on that. There is so much more we can work together in the multilateral fora, as well as bilaterally, to further develop defence cooperation.’ Rajnath Singh in his response mentioned, ‘India’s defence industry can play a meaningful role in the EU’s ‘ReArm initiative’, especially when the EU is seeking to rapidly diversify suppliers and de-risk dependencies.’
The ReArm initiative is aimed at creating a fund of upto 800 billion Euros for defence spending by 2030. It includes 150 billion Euros for joint procurement intending to enhance capabilities thereby reducing dependencies on the US. The EU would be spending around 3.5% of their GDP on defence by 2030. The Indo-EU annual security dialogue will oversee the implementation of the agreement and collaboration.
India’s defence procurements from Europe have been on the increase in recent years, especially since New Delhi began reducing dependency on Russia, largely due to delays on account of the ongoing conflict, Israel’s involvement in Gaza and the unpredictability of the US as a supplier. India has also been seeking technology from the west, which nations have been hesitant to share.
India has already procured 36 Rafale aircraft from France, 24 more are on order as also it is expected to sign an agreement for an additional 114 aircraft, including manufacturing within the country. SAFRAN is partnering with DRDO/HAL to co-develop a new 120-140 KN high-thrust engine for the Advanced Medium Combat aircraft. India is also close to coming to an agreement to manufacture submarines in partnership with Germany and is already manufacturing C-295MW transport aircraft in an agreement with Spain. Currently the navy is procuring heavy weight torpedoes from Italy.
The EU has laid down a 2030 roadmap to cater for capabilities to counter threats emerging from its East (Russia) as also enhancing long range weapon system production and an air and drone shield. Indian industries including Bharat Dynamics, BEL, Garden Reach Shipbuilders, HAL, Larsen and Toubro, Tata Advanced Systems, and Mahindra Defence already have linkages with European industries and are well positioned to partner with EU companies including them investing in technology and capital. India can be a major partner of the EU in joint development and production.
Under SDP, Indian defence industry would also be eligible for funding under SAFE (Security Action for Europe) funds. SAFE is the platform under which loans are provided to member states to boost defence production and industrial capacity. This would benefit Aatmannirbhar Bharat. India is increasing FDI in defence to 74% which could benefit foreign investors.
The EU depleted its ammunition and weapon stocks in supporting Ukraine in its ongoing conflict with Russia and needs immediate replenishment. Indian defence manufacturers produce everything from missiles, ammunition, drones, radars as also armoured vehicles. India is already exporting to a number of countries, including few in Europe. This would now be a formal process.
However, India would not desire that its products are utilized in the Russo-Ukraine conflict. Operation Sindoor displayed the capability of Indian manufactured equipment. An added factor is lower cost of production in India than in the west, with no compromise on quality. However, priority must remain on completing negotiations on Security of Information, which would form the basis of cooperation. Negotiations on this are expected to commence immediately.
There could be a downside too. India’s defence partnership with the EU implies India’s proximity to NATO. While it would be a benefit, it could impact ties with Russia. Further, the EU would desire India move away from Russia, especially in defence collaboration, as Moscow is its main security concern. This is where India would need to balance its ties.
Stock prices of defence manufacturers have witnessed an upswing since the SDP was inked. Overall, the agreement would enhance capabilities as also technology levels of the Indian defence industry while providing EU with their defence requirements at competitive prices. The agreement is a win-win for both sides.
The author is Major General (Retd)
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